Originally Posted by Kevin AA

When Spirit/Allegiant/Frontier do this, then the legacy carriers will do it too (maybe WN but they tend not to follow the crowd). Legacy carriers are followers, not leaders.

That being said, because the ULCC (and forget Allegiant with their 2 or 3 flights a week) just don't have a lot of frequency on one city pair, so there's just no market to sell tickets over a 3 hour time span when there's only one flight in that time period. The market for tickets on some flight of the airline's choosing over an entire day is low $$$$. People value their time a little more than that. The ULCC have figured out how to sell tickets at absurdly low prices (i.e., prices that would result in quick failure if every seat sold for that price) -- seat inventory. The $59 tickets sell out first, then the $79 tickets, etc.

While it may seem that selling $25 tickets for a "some flight today" ticket allows the airline to put you on a lighter load flight instead of letting you pick a more heavily loaded flight, the problem is 1) most flights go out with every seat occupied anyway and 2) most of those people would have paid $59 anyway for a specific flight, so now you've lost $34 on every sale.

Selling a standby ticket is more valuable to the airline because they don't have to confirm you on any flight. You just have to sit at the airport potentially all day long, rather than being notified the day before of just when your chosen flight is going to depart. The same problem of selling the same people cheaper tickets applies. Selling standby tickets is fine if confirmed tickets all cost $750 instead of $59 to $700.